On Creative Accounting: Two Creativity Myths

Harvard Business Review

"Creative accounting" is really bad. Say that in a roomful of managers, and you get nervous laughter. For me, it evokes a wonderful old New Yorker cartoon by Robert Weber , where a small, meek accountant stands before the desk of an overfed chief executive exhorting the accountant to rescue the company: "It's up to you now, Miller. The only thing that can save us is an accounting breakthrough." So, by definition, creativity is morally neutral.

GAAP 17

Eliminate Slogans, Exhortations and Targets

Deming Institute

Edwards Deming’s list of 14 points for western management : Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. If so, you should examine your management system. It is a bad sign and points to serious management problems. Distorting the numbers, a form of creative accounting aimed at looking good rather than doing well, is rampant in American business. Point 10 on W.

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We Can’t Study Short-Termism Without the Right Metrics

Harvard Business

FCLT and McKinsey rely on readily available and machine-readable accounting data to measure myopia. However, firms can efficiently increase margin growth without much revenue growth by managing to squeeze out their fixed costs to service the same level of output. Many compensation plans reward managers for higher earnings and higher stock prices, as opposed to rewarding them for adding long-term value to the firm. Creative accounting measures.

Who Gets a Seat at the Table?

Harvard Business Review

The agendas may be inchoate and the uprisings chaotic, but the message is clear: the established way of leading, ruling, governing, and managing is not working anymore. Yeaney cites three key benefits: First, the process generated "more creativity, accountability, and commitment." "That was a small lesson I learned on the journey. What is interesting and important happens mostly in secret, in places where there is no power.